A financial independence journey fueled by passive income

Top Investment Picks for 2018

As the new year rolls out, its time to share the annual investment pick contest that I run. This is the 3rd year in the running. This is merely meant to be a fun experiment to run and collect top investment picks for 2018 from a community of investors I regularly interact with. There are still some great picks from the 2016 & 2017 top picks, and I invite you to check them for ideas. Remember that investing is a long game — so, focusing on short intervals like a year is not prudent — even though this contest focuses on one year return. Plenty of older picks may still present long term value.

The rules were simple: Pick one investment (stock, bond, fund, commodity, cryptocurrency or any other form of investment security), and present a short & quick investment reason behind the pick. I will track this progress over the year and provide quarterly updates on this blog.

Top Investment Picks for 2018

Before I present the picks, I would like to remind the readers that these are simply picks based on current outlook and each investor should not take this as investment advice. If you decide to pursue these investments, please do your due diligence before investing in any of the securities mentioned.

Without further ado, here are the top picks from the investing community for 2018.

“I’ll go a bit more conservative than everyone here and say $T. Last I checked, the dividend for AT&T was pushing 6%. People are overreacting to the pushback on the Time Warner deal. It’s still a great business with a strong legacy and steady cash flow. The only real problem is its debt, but either the deal goes through and that extra cash flow pays down the debt, or it doesn’t go through and they don’t take on that extra debt. Either way, AT&T is an amazing and safe company that’s yielding in the high 5%’s, and it’s one of the rare exceptions to the time tested rule of avoiding high yielding stocks due to their danger.”

“As a deep value investor I like to buy companies that are completely out of favor. Investors believe GME is Blockbuster Video, but I believe they are wrong. This stock is priced as if GME will eventually go bankrupt. However, management has been preparing for declining revenues by diversifying and preparing for future growth. In the meantime they are generating tons of cash flow and sell at a bargain basement price of 3.3 EV/EBITDA, a 14% Free Cash Flow Yield, and a dividend yield in excess of 8.4% at the current price of $18.07.”

“I’m repeating my pick from last year. Obviously, UEX doesn’t represent the safe, dividend growth type stocks I usually write about. But seeing as this is a stock picking competition, I always like to swing for the fenses. Last year, UEX performed good enough to earn me a 7th place finish. This year, I think it could get me to the top of the pack… or dead last.

Mr. Market has still priced uranium irrationally low. Spot rates still sit below the industry’s cost of production. That means miners lose money on every pound of uranium they haul out of the ground and make it up in volume. This situation is clearly not sustainable. As we saw last year from Cameco, miners will cut production, supplies will tighten, and uranium prices will slowly rise. That could send beaten down names like UEX soaring.”

“I’m bullish on crude in 2018, as I think this run to $60 is just the beginning. XOM shares haven’t really participated in the run-up yet like CVX has, so I think there is some catching up to do. XOM isn’t as levered to the price of oil as some other smaller E&P’s, but the risk/reward at a 3.7% is compelling.”

Hope that the closing price from 2017 is the start price because if so GBLX is off to a good start at +20% on day 1. Should be fun to track this as the year goes on. Lots of different asset types in this years mix.

This is a nice list. Some of these I am interested in and others I have no interest in. It is awesome to see the opinions of others in the community. Myself I like acquiring commodities at this point regardless if its a gold and silver play or if its an oil and gas play. I am very excited to see what lies ahead for all us in 2018. Good luck to everyone and thanks for sharing R2R.

Always fun to play the “fortune teller” game. I think crypto will continue to make news in 2018. Last year my pick CCP was merged with SBRA. Not sure how that was calculated 🙂 Let’s see where we are in one year.

Its a fun exercise. I am not sure how to calculate the merger…so, I left it out of the overall calculations. I guess I could’ve switched to SBRA as your pick? Anyway…lets hope this year is a good one too

Woho, price of my pick is up more than 20%. Nice, btw, to you use total return or price return? I’d say that price return is cheating, because companies like T and my pick, Magnolia, pay a dividend of around 3-6%; which is return, but the price will also fall because of this payment, while others don’t. Should be included if one want’s to compare, but I understand that it will mean more work :/